In a groundbreaking revelation, the United Nations Framework Convention on Climate Change (UNFCCC) has announced that developing countries will need between $5.012 trillion and $6.852 trillion to meet their climate commitments by 2030. This estimate, detailed in the second Needs Determination Report (NDR) released on September 10, 2024, significantly raises the stakes in global climate finance negotiations.
The report, which updates figures from the initial 2021 NDR, represents a vital resource for informing decisions at the upcoming COP29 summit in Azerbaijan, where the contentious issue of the New Collective Quantified Goal (NCQG) on climate finance will be debated. With developed nations already lagging behind in delivering the $100 billion annual climate finance goal, the updated figures present a more accurate and pressing picture of the financial needs required to curb the impacts of climate change in the developing world.
Unprecedented Financial Needs for Climate Action
The NDR highlights that between $455 billion and $584 billion will be needed annually until 2030 to meet developing nations’ climate goals. These figures cover a wide range of needs, from mitigation actions, such as reducing greenhouse gas emissions, to adaptation efforts, which help vulnerable nations cope with the worsening impacts of climate change.
Mitigation needs dominate the report, accounting for 79% of the total costed needs, with energy leading the way. Adaptation needs, which include sectors like agriculture, water supply, and health, make up 16% of the overall costed needs. The report also addresses cross-cutting measures like disaster management and loss and damage, although these represent a smaller share of the total.
Global Responsibility: Conditional and Unconditional Actions
The report identifies that 48% of the total required funding, approximately $2.4 trillion, is for conditional actions. These are actions that developing nations can only implement with international support in the form of finance, technology transfer, and capacity building. Meanwhile, 18%, or $882 billion, is designated for unconditional actions that countries will undertake independently.
The remaining needs approximately $1.8 trillion are unspecified in terms of conditionality, reflecting the complexities and uncertainties involved in planning climate action in developing regions.
Geographic Distribution: Africa and Asia Lead the Charge
Africa and Asia emerge as the regions with the highest financial needs. Asia’s costed needs alone reach between $3.3 trillion and $4.9 trillion, while Africa, with a greater focus on adaptation, has the largest overall need. However, the report cautions that some regions, such as Latin America and the Caribbean, may have under-reported needs due to a lack of data, suggesting that the actual figure may be even higher.
Significance for Global Climate Negotiations
The second NDR is expected to play a critical role in shaping discussions at COP29, where the global community will aim to set new climate finance targets. The report underscores the widening gap between the existing financial commitments from developed nations and the actual needs of developing countries.
As the NCQG negotiations approach, the NDR emphasizes the responsibility of wealthier nations to support climate action in regions that are disproportionately affected by climate change but contribute far less to global emissions. These findings further highlight the importance of increasing international support to ensure that developing countries can meet their Nationally Determined Contributions (NDCs) under the Paris Agreement.
Implications for Climate Policy and Global Cooperation
The updated figures in the NDR serve as a sobering reminder of the scale of the climate crisis. They reinforce the urgency of mobilizing global financial resources and fostering cooperation between developed and developing nations. As the world faces unprecedented climate impacts, the need for large-scale financial commitments to mitigate and adapt to these changes has never been more critical.
The report sets the stage for a potentially transformative COP29, where the future of climate finance and the success of global climate action will be decided.